Question 1

With General Electric's strategic planning grid:
A) the industry attractiveness dimension focuses on the ability of the company to pursue a product-market plan effectively.
B) managers must follow an objective, single-factor approach.
C) the business strengths dimension focuses on whether this product-market plan looks like a good idea.
D) managers make three-part judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans.
E) opportunities that fall into the red boxes are the firm's best growth opportunities.

Accepted Answer

The General Electric strategic planning grid requires managers to make three-part judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. Therefore, option D is the correct answer.

Question 2

General Electric's "strategic planning grid":
A) focuses on market share and market growth rate.
B) ignores some important issues--such as competitive structure and the environmental impact of a plan.
C) requires that all opportunities be judged either "High" or "Low."
D) substitutes quantitative estimates for management judgment.
E) None of the above is true.

Accepted Answer

The General Electric's strategic planning grid considers multiple factors beyond just market share and growth rate, including competitive structure and environmental impact. It also allows for more nuanced evaluations than just "High" or "Low" and incorporates management judgment alongside quantitative estimates.

Question 3

Identify the incorrect statement pertaining to multiproduct firms.
A) They have a more difficult strategic planning job than firms with only a few products or product lines.
B) They have to develop strategic plans for very different businesses.
C) They have to balance plans and resources so the whole company reaches its objectives.
D) They have to get needed resources without milking some businesses and eliminating others.
E) They may form strategic business units, or use portfolio management.

Accepted Answer

Multiproduct firms may need to allocate resources strategically, which can sometimes involve reducing investment in less profitable areas to support more promising ones.

Question 4

Organizational units (within a larger company) which focus their efforts on selected product-markets and are treated as separate profit centers are called:
A) marketing departments.
B) SPMs.
C) functional departments.
D) strategic business units.
E) BTUs.

Accepted Answer

The description provided matches the definition of strategic business units (SBUs), which are independent units within a larger company that focus specifically on select product-market offerings and are accountable for their own profitability. This approach allows the company to allocate resources and make strategic decisions based on the unique needs and requirements of each SBU.

Question 5

General Electric's "strategic planning grid":
A) focuses on market share and market growth rate.
B) requires subjective judgments about business strengths and industry attractiveness.
C) requires that all opportunities be judged either "High" or "Low."
D) substitutes quantitative estimates for management judgment.
E) All of the above are true.

Accepted Answer

The strategic planning grid developed by General Electric is also known as the GE/McKinsey matrix. It requires subjective judgments about business strengths and industry attractiveness, and businesses are evaluated based on two factors: industry attractiveness and competitive position. The matrix does not require that all opportunities be judged as either "high" or "low," and it does not substitute quantitative estimates for management judgment.

Question 6

GE's planning grid approach
A) doesn't work because different managers usually come to different conclusions given the subjective evaluations involved.
B) is really the same thing as the total profit approach.
C) overemphasizes short term profitability.
D) is superficial because it considers only size and expected market share, and ignores other possibly important factors.
E) could be adapted easily by another firm with different objectives.

Accepted Answer

The answer of GE's planning grid approach
A) doesn't work because...

Question 7

The business strengths dimension of the GE grid focuses on:
A) market diversity.
B) the question: Does this product-market plan look like a good idea?
C) the ability of the company to pursue a product-market plan effectively.
D) industry profitability.
E) the social and legal environment.

Accepted Answer

The business strengths dimension of the GE grid focuses on the ability of the company to pursue a product-market plan effectively. Choices A, B, D, and E are not directly related to the business strengths dimension.

Question 8

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as:
A) yellow--borderline.
B) red--for no growth.
C) green--for growth.
D) could be yellow, red, or green--because the grid really doesn't deal with "medium" ratings.

Accepted Answer

According to General Electric's strategic planning grid, an opportunity rated "medium" in both industry attractiveness and business strengths falls in the yellow-borderline category. This indicates that the opportunity requires careful consideration before investing resources, as it may not be as promising as those opportunities in green-for-growth category, but may still have some potential for growth and profitability.

Question 9

Portfolio management:
A) may place too much emphasis on easy-to-compare quantitative criteria.
B) identifies which opportunities should be supported, "milked," or sold off.
C) tends to overemphasize short-run profitability and return on investment.
D) treats products or SBUs as though they were stock investments.
E) All of the above are true.

Accepted Answer

Portfolio management involves evaluating and managing a company's products or business units as if they were investments, often focusing on quantitative criteria, short-term profitability, and strategic decisions about which to support, divest, or optimize.

Question 10

General Electric's "strategic planning grid":
A) substitutes precise quantitative estimates for management judgment and intuition.
B) places too much emphasis on industry attractiveness, almost ignoring the firm's own business strengths.
C) emphasizes market share and market growth rate.
D) is oversimplified in that it assumes all opportunities must be either "good" or "bad."
E) None of the above is a true statement.

Accepted Answer

The strategic planning grid developed by General Electric does not substitute quantitative estimates for management judgment, nor does it overly emphasize industry attractiveness or oversimplify opportunities. It is a more nuanced tool that considers multiple factors, including business strengths and industry attractiveness, to evaluate strategic options.

Question 11

GE's Planning Grid approach to evaluating proposed and existing plans and businesses:
A) considers how profitable opportunities are likely to be.
B) reflects the corporation's objectives.
C) helps managers see why some ideas are supported and others are not.
D) can use quantitative data but it is basically a qualitative approach.
E) All of the above are true.

Accepted Answer

The GE Planning Grid approach considers profitability, reflects objectives, and helps managers understand why certain ideas are supported or rejected. It can also use both quantitative and qualitative data. Therefore, all of the above statements are true.

Question 12

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as:
A) yellow--borderline.
B) red--for no growth.
C) green--for growth.
D) could be yellow, red, or green--because the grid suggests that opportunities with medium ratings need more analysis.

Accepted Answer

According to the strategic planning grid, opportunities that are rated "high" in terms of business strengths and "medium" in terms of industry attractiveness are categorized as "grow." Therefore, the best choice would be "green--for growth."

Question 13

According to the General Electric strategic planning grid, a business that is the strongest in its industry:
A) should still be considered as a "no-growth" prospect unless the industry attractiveness is high.
B) is a good prospect, provided the industry has at least medium attractiveness.
C) should automatically receive a large investment.
D) All of the above are true.
E) None of the above is true.

Accepted Answer

The General Electric strategic planning grid suggests that a business that is the strongest in its industry is a good prospect, but only if the industry has at least medium attractiveness. Therefore, option B is the correct answer. Options A and C are incorrect as they overgeneralize the recommendation.

Question 14

The Tennis Products Group is an organizational unit within Sporting Goods for America Company (SGA) that focuses on the design, production, marketing, and sales of tennis balls, tennis racquets, and other tennis-related products. Tennis Products Group is a ____ for SGA.
A) functional unit
B) strategic alliance partner
C) portfolio group
D) franchise unit
E) strategic business unit

Accepted Answer

The Tennis Products Group is focused on a specific product line (tennis balls, tennis racquets, etc.) and operates independently within the larger structure of SGA. This fits the definition of a strategic business unit (SBU), which is a self-contained business entity within a larger organization with its own distinct mission, goals, and strategy.

Question 15

Organizational units within a larger company which focus their efforts on selected product-markets and are treated as separate profit centers are called:
A) portfolios.
B) strategic business units.
C) BTUs.
D) functional departments.
E) basing points.

Accepted Answer

Strategic business units (SBUs) are organizational units within a larger company that are responsible for a specific product or service and are treated as separate profit centers. SBUs have their own strategies, goals, and marketing plans, and are normally given autonomy to operate independently within the larger organization. The other options, portfolios, BTUs, functional departments, and basing points, are not commonly used to describe these types of organizational units.

Question 16

Portfolio management:
A) heavily emphasizes long-run profitability.
B) is preferred over the General Electric strategic planning grid.
C) allows a manager to compare different divisions within the company.
D) is another name for the combined target market approach.
E) None of the above is true.

Accepted Answer

Portfolio management involves analyzing and evaluating different business units or products within a company, and making strategic decisions about how to allocate resources among them. This allows a manager to compare different divisions within the company and make decisions based on long-term profitability. The General Electric strategic planning grid is a tool used in portfolio management to classify business units based on their market position and potential. The combined target market approach is not the same as portfolio management.

Question 17

Strategic business units:
A) Are not treated as separate profit centers.
B) Are organizational units within a larger company.
C) Should receive an equal amount of attention and resources.
D) Should never be dropped or sold.
E) None of the above.

Accepted Answer

Strategic business units (SBUs) are standalone units within a larger company that are responsible for their own strategy, operations, and profits. They are often treated as separate profit centers and require specific resources and attention from the parent company. It is not necessary for SBUs to receive equal attention and resources, and there may be times when a company decides to drop or sell an SBU if it is not performing well or is no longer aligned with the company's goals.

Question 18

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" should be:
A) called a strategic business unit.
B) supported if it is an existing business, but probably not supported if it is a new opportunity.
C) immediately supported with large investment.
D) sold off or discontinued.
E) viewed as a "green" (high growth) opportunity.

Accepted Answer

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" is considered a "question mark." This means that it is a new or existing business with potential but has not yet proven its ability to succeed in the market. Therefore, it should be supported if it is an existing business to see if it can become a star, but probably not supported if it is a new opportunity.

Question 19

A marketing manager in a large corporation wrote the company's president a memo in which she said: "The performance of our SBU has improved." An "SBU" is a:
A) struggling business unit.
B) small business unit.
C) selective branding unit.
D) strategic business unit.
E) secondary bidding unit.

Accepted Answer

SBU stands for Strategic Business Unit, which is a business unit within a larger corporation that operates as a separate entity and has its own strategic objectives, goals, and management. Therefore, choice D is the correct option.

Question 20

Which of the following statements concerning strategic business units (SBUs) is NOT TRUE?
A) SBUs are organizational units within a larger company.
B) SBUs are treated as separate profit centers.
C) SBUs focus on some product-markets.
D) By forming SBUs, a company acknowledges its similar business lines.
E) SBUs that produce only average profits should be allowed to generate profits to support SBUs with better growth prospects.

Accepted Answer

The answer of Which of the following statements concerning strategic...

Quiz 3: Evaluating Opportunities in the Changing Marketing Environment

With General Electric's strategic planning grid:

General Electric's "strategic planning grid":

Identify the incorrect statement pertaining to multiproduct firms.

Organizational units (within a larger company) which focus their efforts on selected product-markets and are treated as separate profit centers are called:

General Electric's "strategic planning grid":

GE's planning grid approach

The business strengths dimension of the GE grid focuses on:

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as:

Portfolio management:

General Electric's "strategic planning grid":

GE's Planning Grid approach to evaluating proposed and existing plans and businesses:

Using General Electric's "strategic planning grid," an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as:

According to the General Electric strategic planning grid, a business that is the strongest in its industry:

The Tennis Products Group is an organizational unit within Sporting Goods for America Company (SGA) that focuses on the design, production, marketing, and sales of tennis balls, tennis racquets, and other tennis-related products. Tennis Products Group is a ____ for SGA.

Organizational units within a larger company which focus their efforts on selected product-markets and are treated as separate profit centers are called:

Portfolio management:

Strategic business units:

According to the General Electric strategic planning grid, an opportunity which is low on the "business strengths" dimension but high on the "industry attractiveness" should be:

A marketing manager in a large corporation wrote the company's president a memo in which she said: "The performance of our SBU has improved." An "SBU" is a:

Which of the following statements concerning strategic business units (SBUs) is NOT TRUE?